The crash we saw late last week was among the most severe we’ve seen in our 50 years of experience in the markets.
Last Thursday, April 3, over $2.7 trillion of market value was wiped out of the S&P 500. The following day (April 4) another $3.3 trillion was eliminated. Were you prepared for the crash?
Let’s face it; over the past several months, you haven’t heard or seen many analysts or firms that have been forecasting a bear market this year.
However, since early January Bert Dohmen has been warning investors that the markets were likely entering a bear market this year.
In our January 12, 2025 Wellington Letter we wrote,
“the stock market could be heading for a Bear Market. We became more bearish on the stock market in mid-December based on our technical analysis. It is now being confirmed.”
In the same issue, we also offered our insights on how investors could position themselves ahead of the bear market,
“For experienced investors who know how to control risk, bear market positions might be beneficial in the coming days and weeks… A bear market in stocks is a high probability this year.”
Bert predicted that this would be a “liquidation bear market,” when almost all stocks would be sold just to get cash. After the massive selling the markets have endured since February, Bert’s forecasts are all coming true.
In our latest Wellington Letter (published Thursday, April 3, titled “Bear Markets Can Be Very Profitable“), we showed just how many stocks are already in official bear markets (i.e. down 20% or more from a 52-week high, data as of April 3).
- 62% of NASDAQ 100 stocks are now in a bear market
- 53% of S&P 500 stocks are now in a bear market
- 53% of Russell 2000 stocks are now in a bear market
- 40% of DJI stocks are now in a bear market
Yet, analysts in the media still refuse to acknowledge the bear market. Unbelievable!
In that April 3 Wellington Letter we explained the confirmations of a bear market and recession now, saying,
“Today, nearly 3 months after our first “bear market” forecast, we heard the first Wall Street guy mentioning “bear market.” We have been saying that in our services and on interviews for weeks. Today we even heard someone talk about a recession, which until now they have ignored.
When Wall Street starts mentioning those two seemingly “prohibited” words, you can bet that we are in each one (a bear market and recession)…
Imagine that perhaps 99% of all money managers now are still heavily invested in equities. There is still lots of selling to be done.”
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Here are the important market calls Bert made in our Wellington Letters since January, which helped our members prepare for the bear market.
Could these warnings have helped protect you from severe losses in your portfolio?
Our advanced technical analysis once again helped us identify the bear market and crash ahead of time. Unfortunately, there are only a few master technical analysts still working, such as ourselves, who know how to detect such critical chart formations.
Of course, there will be relief rallies as stocks become way oversold, along with “rallies on the news” of any tariff negotiations.
However, those rallies will quickly fail and be followed by another market selloff. This is common behavior in a bear market.
Just take a look at the S&P 500 chart below from the last bear market (from late 2021 to late 2022) when the S&P plunged 27.5% in a little over 10 months.
Notice how after the S&P 500 made a new record high in January 2021, it plunged 12.4%. There was a short relief rally, but that was soon followed by another 10.4% selloff.
There were other brief rallies, followed by bigger plunges throughout the year. In fact, the most severe plunge of that bear market occurred at the very end when the S&P crashed 19.3% in the final two months.
Could you have stomached the volatility during that time without professional guidance? Would you have been able to stick to your strategy despite the brief up-moves and huge down-moves?
CONCLUSION: The big, overleveraged and overexposed investors, who held their positions over the past several weeks, are now trapped with huge losses after the recent market crash. This creates great opportunities for informed active traders and investors who have the best guidance on selling short or buying “inverse” ETFs.
And this is how a bear market can be very profitable.
Market crashes and bear markets have often been the most profitable times for our valued members and therefore our business. We have successfully guided our members and showed them how to grow their wealth during bear markets over the past 50 years, which is why our long term members love bear markets!
We believe it will be a volatile year, but a great year full of opportunities for informed investors who know or learn how to prosper during bear markets, often much quicker than they do in bull markets.
No one should think the “worst is behind us.” We see the turmoil is likely just getting started.
This is why it is so important for investors to stay up-to-date with frequent analysis on the latest market developments and access to unbiased research.
The old metrics such as earnings, P/E ratios, etc. will never give advanced warnings like technical analysis does, as you can see above.
If you wish to read our complete, up-to-date analysis from our most recent award-winning Wellington Letters (the March 30, 2025 issue was titled “The Next Leg of the Bear Market”), sign up today!
You will not only can gain instant access to last week’s issues, but also to our most recent issues over the past 2 months – click this link to become a Wellington Letter Member
Wishing you successful investing,
Bert Dohmen